FSA/HDHP Problems

[JuSp02]

DH and I messed up. My employer offers a better health insurance plan than my husband so I typically sign up for a family plan whereas DH usually opts out of insurance with his employer. Last year, I signed us up for a normal health insurance plan. During open enrollment, I switched us to a high deductible plan so we could fund an HSA. DH separately signed up for an healthcare FSA for 2017 during his open enrollment period. DH has called his employer to see if they can stop his FSA from funding, but they are not sure they can.

What are the penalties for this? Can we still use his FSA money and just take a tax penalty or can we not touch the money at all? What else can we do?

[sonjak]

You can use the FSA on some things right away (like dental and vision).  You can't use it on medical until the HSA is all used.  So hopefully he didn't sign up for too much in the FSA and/or you have some of those expenses.  (This is why I do both.  Small amount in FSA to cover my contacts and solution and save HSA for future expenses.)

Hope that helps.